Catholic Diocese of Fresno to file for bankruptcy

Church cites numerous claims of child sex abuse as reason for decision, expects to file for Chapter 11 bankruptcy in August

(Rigo Moran)
Darren Fraser
Published June 25, 2024  • 
9:00 am

FRESNO – Facing a wave of sexual abuse claims, the Roman Catholic Diocese of Fresno will file Chapter 11 bankruptcy, according to an open letter written by the Reverend Joseph Brennan.

Brennan, who is the bishop of the diocese, wrote in the letter – published on May 28, 2024 – that after a three-year period ended on the Dec. 31, 2022, during which state law allowed people to file previously expired claims of childhood sexual abuse, the diocese received 154 claims. The financial implications of settling these claims prompted Brennan to make the decision for The Roman Catholic Bishop of Fresno, the sole legal entity affected by the claims, to file for bankruptcy. Brennan said the diocese expects to file in August.

“What we are facing gives us the opportunity to redouble our efforts in creating a safe environment for everyone in and out of the church and address real issues in atoning for the sin of clergy abuse against children,” Brennan wrote.

He added that filing for bankruptcy was the only action available that would ensure all claims were handled equitably.

“The reorganization (bankruptcy) ensures all victims are compensated fairly and funds are not depleted by the first few cases addressed,” Brenna said in his letter.

Brennan said schools, parishes and organizations will operate as usual. Catholic Charities and The Fresno Diocese Education Corporation, which runs the schools, are separate legal entities and are not affected by the bankruptcy filing.

In a letter published the same day as Brennan’s and addressed to Catholic school families of the diocese, Joan Bouchard, Superintendent of Catholic Schools, assured families schools will operate normally.

“Your child’s education and your community will remain uninterrupted,” Bouchard wrote. “Our Catholic schools operate under a separate legal and ecclesial entity and will not be filing for bankruptcy protection.”

She added, “I imagine many of you will join Bishop Brennan, myself and the rest of the faithful in our sadness and disappointment upon hearing of the immense suffering endured by victims. It is a chilling reminder of our church’s past. We want to reassure you that your children’s safety is of the utmost priority and pledge to continue our efforts in creating a safe environment for all.” 

The diocese’s website hosts a page devoted to frequently asked questions regarding sexual abuse claims.

The website explains that the diocese is dealing with a surge of new lawsuits because of Assembly Bill 218, passed by the California Legislature in 2018. This law removed the three-year limit for filing child sex abuse claims. The deadline to file such cases ended on December 31, 2022, allowing survivors of sexual abuse to sue, no matter how long ago the abuse happened.

PAYING THE CLAIMS

According to the website, the diocese is on the hook for paying claims and can expect no financial assistance from Rome.

“That is not an option. In fact, dioceses all over the world support the Vatican, which is an independent entity. There are no Vatican funds available to us in this situation,” the diocese wrote on its website.

The diocese said it currently has enough assets to continue normal operations, but these assets, including insurance coverage, may not be sufficient to cover the new claims; a situation that could render the diocese insolvent.

Brennan’s announcement was greeted with dubious ire from the Survivors Network of those Abused by Priests (SNAP). On May 28, SNAP issued its reply to Brennan’s letter. It described the decision to file for bankruptcy as a scorched earth policy.

“Bankruptcy is not the only way to achieve fair recoveries in all of the lawsuits against the Diocese,” SNAP posted on its website. “In the last window, universal agreements were reached between the Church and survivors and their attorneys, without the draconian consequences that bankruptcy will bring along with it.”

SNAP argues that despite the diocese’s contention that all claims will be treated equitably, and that there is no time limit to affect a claim, the bankruptcy process will award those who filed quickly, leaving out those who file late.

“Once the bankruptcy proceeds to its conclusion, anyone abused before the filing date who did not come forward by the bar date is forever barred from filing a lawsuit for damages,” SNAP wrote on its website. “This would include those who do not yet remember their abuse, those who do not yet understand the impact it has had on their life, those who are not yet ready to speak out, and – most disturbingly – those children who are too young to understand that they need to file a claim before the bar date.”

The Times asked how much money in claims the diocese has paid out to date but the diocese declined to comment.

The diocese is divided into nine vicariates or areas, extending from Mariposa to the High Desert, including Madera, Fresno Metropolitan, Fresno Rural, Kings, Tulare, Bakersfield Metropolitan and Kern Rural.

Darren Fraser
Reporter